Axis Bank is one of the most reputed banks in India. They offer a wide range of financial products with attractive features and benefits. From home loans and personal loans to credit cards and investment options, they offer it all. If you have an Axis Bank credit card, you would be aware of the interest rate charged on your card if you do not pay the entire balance due amount within the due date. When you view your credit card statements, if you wondered why it is higher than you expected, it could because of the interest charged by the bank on your credit card balance amount.
Many people do not understand how the interest rate is calculated on credit cards and land up paying the amount reflecting on their credit card bill. But, if you are someone who wants to know how the interest rate is calculated on your credit card, read on.
Also known as “Finance Charges” or Interest Charges”, an interest rate is a fee charged by your credit card provider on the amount you borrowed using your card. However, you will be charged an interest rate only if you haven’t paid the total outstanding bill amount within the due date or the interest-free period, whichever is applicable. For example: if your total credit card balance is Rs.10,000 and you make a partial payment of Rs.5,000 or the minimum due amount and carry forward the remaining amount to the next billing cycle, an interest rate will be levied.
However, if you clear the total outstanding balance within the due date, you do not have to pay an additional fee. That is the best thing about credit cards. But, if you are someone who cannot pay the total amount within the due date, it is very important for you to know about interest rate and how it is calculated.
If you want to know how your credit card interest rates are calculated, you should know about the “Annual Percentage Rate”. An Annual Percentage Rate is a rate that your credit card provider charges you annually on the balance amount on your card. However, in reality, banks charge a monthly interest rate on the balance due amount on a daily basis. You can calculate your Daily Periodic Rate by taking the Annual Percentage Rate and dividing it by the number of days in the year.
For example: If the monthly interest rate charged by your credit card provider is 13%, the formula used to calculate the interest rate you land up paying on an average daily balance method is as follows:
Interest Rate = [(Total Outstanding Amount x 13% per month x 12 months) X number of days] / 365 days.
For this very reason, when you apply for a credit card, it is very important to know your Annual Percentage Rate and Monthly Periodic rate.
|Axis Bank Credit Cards||Monthly Rate||Annual Rate|
|Axis Bank Vistara Infinite Credit Card||2.95% per month||41.75% per annum|
|Axis Bank Select Credit Card||2.95% per month||41.75% per annum|
|Axis Bank Vistara Credit Card Privilege||2.95% per month||41.75% per annum|
|MyWings Card||2.95% per month||41.75% per annum|
|Pride Platinum||2.95% per month||41.75% per annum|
|Axis Bank Reserve Credit Card Miles & More World Select Card Miles & More World Card||2.95% per month||41.75% per annum|
|Axis Bank Signature Credit Card||2.95% per month||41.75% per annum|
|Pride Signature Card||2.95% per month||41.75% per annum|
||3.25% per month||46.78% per annum|
||2.50% per month||34.49% per annum|
Apart from not paying the total due amount within the due date, there are many other activities or transaction on your card that attracts interest rates. Some of them are as follows:
What is an interest-free period? Also known as “Grace Period”, an interest-free period is the time period which is usually in days, where your credit card provider will not charge you interest on purchases made using your credit card. Generally, Axis Bank offers an interest-free period that ranges from 20 to 50 days depending on the date of the transaction. This feature is applicable only if your previous month’s balance is paid in full.
If you make the total outstanding balance within the interest-free period, you will not be charged anything additional. Which means that you have enjoyed the credit facility at a zero percent rate.
If you have not paid the total due amount within your due date, the interest rate will be charged on the total due amount from the transaction date till all the previous balance is paid in full.
On all cash advances, Axis Bank charges the monthly interest rate from the date of withdrawal till the amount is paid in full. Please refer to the table above to know the monthly interest rate on your Axis Bank credit card.
Using your credit card wisely can reap many benefits. However, if you overuse it and do not pay the total due amount in full, you will be charged with a high interest rate. Accumulating a high interest rate will push you into the debt trap. If you default on your credit card payments, Axis Bank will get in touch with you and remind you to make your payment. If you aren't able to pay the minimum due amount, your credit card will be blocked. Axis Bank has the right to report you to the Credit Information bureaus which will negatively affect your credit score. If you feel you are charged a high rate of interest, please get in touch with the bank and check for alternatives.
You can reach the Axis Bank customer service department by dialing 1800 209 5577 or 1800 103 5577. These numbers are accessible from any landline or mobile phone in India. You can dial +91 - 22-27648000 if you are calling from outside India. Alternatively, you can write to firstname.lastname@example.org or visit https://application.axisbank.com/webforms/axis-support/index.aspx for more assistance.